In the present paper, a three-dimensional numerical investigation of pulverized dry lignite was undertaken, integrating the combustion of four different scenarios adopted experimentally in a 100-kW Chalmers laboratory-scale furnace. A hybrid unstructured grid computational fluid dynamics (CFD) code was used to model and analyze: an air-fired, oxy-fuel OF25 (25 vol % O2 concentration), oxy-fuel OF27 (27 vol % O2 concentration), and oxy-fuel OF29 (29 vol % O2 concentration). The appropriate mathematical models with the related kinetics parameters were implemented to calculate the temperature distributions, species concentrations (O2, CO2, CO, H2O, and H2), NOx emission concentrations, and the radiation heat transfer. The multistep chemical reaction mechanisms were conducted on the gas phase and solid phase of coal reaction in one-, two-, and three-step reaction schemes. The predicted results showed reasonably good agreement against the measured data for all combustion cases; however, in the three-step scheme, the results were highly improved, particularly in the flame envelope zone. For the NOx calculations, the obvious differences between the air-fired and oxy-fuel (OF27 and OF29) cases were evident. In the OF27 and OF29 cases, the expected increase in the flame temperatures and CO2 and H2O concentrations led to a slight increase in the radiative heat fluxes on the furnace wall, with respect to the air-fired case. As a continuation of improvement to the oxy-fuel combustion model, this numerical investigation might probably provide important information toward future modeling of a 550-MW, large-scale, brown coal oxyfuel tangentially fired furnace.